I did not see a topic dedicated to the official Labour party stance on NAMA, feel one is appropriate for each and every political party (Mods - feel free to merge to another if it exists)
Burton Comments - 21 August
Nama a monument to greed that created crisis, Burton tells Humbert summer schoolhttp://www.labour.ie/press/listing/1250 ... 69441.html
The NAMA Bill rests on one particular clause Section 58 which sets out the rules for valuing the bank loans. It is a shoddy piece of work that does no credit to the Minister.
It could hardly be otherwise as Brian Lenihan is attempting, like Janus of the ancient Roman myth, to show two faces to the world looking in opposite directions.
One face is the Minister who needs to insist on the protection of the public interest. So the clause sets out current market value, however diminished, as a principle. That is what the former Swedish Minister Mr Lundgren recommended in his evidence to the Finance Committee. The results from AIB and the evidence presented in some of the High Court cases show just how heavy a discount is properly called for.
But Minister Lenihan also presents a different Janus face, reflected in a second basis of valuation contained in Section 58, a potentially bogus concept called Long Term Economic Value, which is the convenient cover he and Mr. Cowen use for a policy to pay way over the odds for the banks’ dodgiest loans on the pretext that the assets so acquired have an enduring value that is not reflected in the current market. That is political and economic mumbo jumbo
‘I have been reading remarks by Simon Johnson, a former IMF official with long experience of economic crises. This is what he has to say:
the real concern of the fund’s senior staff, and the biggest obstacle to recovery, is almost invariably the politics of countries in crisis. Typically, these countries are in a desperate economic situation for one simple reason—the powerful elites within them over-reached in good times and took too many risks’.
So how does the IMF judge a Government’s resolve?
The IMF staff looks into the eyes of the Minister of Finance and decides whether the government is serious. The fund will give a country a loan but first it wants to make sure the Minister is ready, willing, and able to be tough on some of his friends. If he is not ready to throw former pals to the wolves, the IMF can wait.
I wonder how an IMF team would judge the capacity of this set of Ministers to face down their old cronies. Would a serious IMF team look at Brian Cowen in the eye and see there a man with the resolve with the determination to show his former friends the door.
Well would he? I think we all know the answer to that. It might have to come to that eventually but first this Government has a mindset that the plain people of Ireland are to be the first in the firing line, the children of Ireland are to be the target of cuts in welfare, in education, in health care before any effort is made to face down the elite that has been the favoured recipient of public largesse, of tax breaks, of easy tax exile status, of Cinderella rules, of public contracts